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T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, June 2, 2025, Vol. 26, No. 109
Headlines
A R G E N T I N A
ARGENTINA: Claims Return to Global Markets With Peso Bond Sale
ARGENTINA: Officials Beef With Darin Over Price of Empanadas
[] ARGENTINA: Ratifies WHO Withdrawal During RFK Jr Visit
B R A Z I L
AZUL SA: NYSE to Commence Delisting Proceedings
BRASKEM SA: Fitch Lowers IDR to 'BB', Outlook Stable
C A Y M A N I S L A N D S
SHELF DRILLING: Moody's Affirms 'B3' CFR, Outlook Remains Stable
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Gets Pressured by Tourism Sector
M E X I C O
ASCEND PERFORMANCE: Seeks to Hire Ordinary Course Professionals
P E R U
VOLCAN COMPANIA: Moody's Hikes CFR to B3 & Alters Outlook to Stable
P U E R T O R I C O
COOPERATIVA DE SEGUROS: A.M. Best Affirms 'C' Fin. Strength Rating
INSTITUTO DE EDUCACION: Seeks Subchapter V Bankruptcy
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A R G E N T I N A
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ARGENTINA: Claims Return to Global Markets With Peso Bond Sale
--------------------------------------------------------------
Ignacio Olivera Doll & Kevin Simauchi at Bloomberg News report that
Argentina's government will issue a five-year bond denominated in
pesos that's aimed at international investors who are allowed to
purchase it in US dollars, a move the government hailed as its
return to global markets after a sovereign restructuring during the
pandemic.
The May 28 auction is set to raise up to US$1 billion, Finance
Secretary Pablo Quirno posted, according to Bloomberg News.
Analysts quickly pointed out the bond will help accumulate the
Central Bank's foreign reserves, while Economy Minister Luis Caputo
described the auction as a milestone, even though one of his
deputies clarified it would be issued under local Argentine law
instead of New York law like most international bonds, Bloomberg
News relays.
"Argentina returns to earn international market access to refinance
capital in local currency," Caputo posted shortly after on X too,
Bloomberg News relays. "It's something that the vast majority of
countries do with normality, but wasn't possible for Argentina
given its disastrous economic track record," he added.
Quirno posted that it will mature in 2030 with a fixed interest
rate and the instrument will also include a two-year put option,
giving investors an early exit alternative before the next
presidential election in late 2027, Bloomberg News recalls.
It's the first time in nine years that Argentina has issued a
peso-denominated bond targeted at international investors,
Bloomberg News notes. The last sale of this kind happened during
the last pro-business administration when Argentina sold peso debt
to global funds such as Franklin Templeton, Bloomberg News relays.
Analysts applauded the auction as a sign of Milei's ability to rein
in triple-digit inflation and maintain a relatively stable exchange
rate, Bloomberg News notes.
"Argentina's return to the markets to issue long-term debt linked
to the peso is a key sign of confidence in the government's
stabilisation program and its ability to restore the Argentine
peso's credibility as a store of value," said Juan Pedro Mazza,
institutional sales associate with Buenos Aires-based brokerage
Grupo Cohen SA, Bloomberg News says.
The bond sale is part of a broader strategy by Caputo and President
Javier Milei to boost Argentina's international reserves ahead of a
key target date under the country's US$20-billion agreement with
the International Monetary Fund, Bloomberg News discloses.
Argentina has committed to raising its net international reserves
by US$4.4 billion by June 13 to comply with the IMF program, but
private economists' estimates indicate the monetary authority
remains significantly short of that goal, Bloomberg News discloses.
To help bridge the gap, the government also recently announced it
is negotiating a US$2-billion repurchase agreement, or repo, with a
group of international banks, Bloomberg News notes.
The government will also offer a range of peso instruments to
domestic investors, including short-term notes maturing between
June and November 2025, and medium-term bonds maturing in 2026,
Bloomberg News recalls.
The peso bond sale to global investors marks a new step in the
Milei administration's evolving financial strategy, Bloomberg News
says. While the government has focused heavily on fiscal
tightening and monetary restraint, it now appears to be seeking
fresh external funding sources to meet IMF targets without drawing
down Central Bank reserves or issuing pesos that would add pressure
to Argentina's already high inflation, Bloomberg News notes.
Milei's economic team has resisted buying dollars in Argentina's
official currency market by offering pesos, in line with its
broader objective of avoiding monetary expansion, Bloomberg News
relays. This strategy is part of a plan to drive down inflation
and strengthen the peso in the run-up to Argentina's midterm
elections in October, Bloomberg News says.
The bond sale "opens door to reserve accumulation through future
deals," said Joaquin Bagues, managing director at brokerage Grit
Capital Group. "This deal is a liquidity event for the new age of
carry trade in Argentina," he added.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota) -- with an approved immediate
disbursement of an equivalent of US$9.65 billion. Argentina's
IMF-supported program sought to improve public finances and start
to reduce persistent high inflation through a multi-pronged
strategy.
On April 11, 2025, the IMF further approved a 48-month Extended
Fund Facility (EFF) arrangement for Argentina totaling US$20
billion (or 479 percent of quota), with an immediate disbursement
of US$12 billion, and a first review planned for June
2025 with an associated disbursement of about US$2 billion. The
program is expected to help catalyze additional official
multilateral and bilateral support, and a timely re-access to
international capital markets.
Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term
Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to
'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF
program, among other things. S&P Global Ratings, in February 2025
lowered its local currency sovereign credit ratings on Argentina to
'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from
'raB+'. Moody's Ratings, in January 2025, raised Argentina's local
currency ceiling to B3 from Caa1 and the foreign currency ceiling
to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term
Foreign and Local Currency Issuer Ratings to B (low) from CCC in
November 2024.
ARGENTINA: Officials Beef With Darin Over Price of Empanadas
------------------------------------------------------------
Manuela Tobias at Bloomberg News reports that President Javier
Milei and his finance chief criticised a globally known Argentine
actor for complaining that the country's staple food was
overpriced, stirring debate about how expensive Argentina has
become in dollar terms.
Ricardo Darin, the award-winning star of Netflix science-fiction
hit The Eternaut drew the administration's ire when he told a
popular weekend dinner-show host he paid 48,000 pesos (US$42) for a
dozen empanadas and questioned Milei's latest tax measures meant to
spur dollar spending, according to Bloomberg News. The government
accused the actor of snobbery and making generalisations after
buying a gourmet version of the savoury pastry, Bloomberg News
says.
The price of empanadas - and the impact of Milei's policies on
pocketbook issues -dominated headlines, a preview of what's to come
as October midterm elections inch closer, Bloomberg News discloses.
"There's a lot of people having a very hard time," Darin said on
Mirtha Legrand's show, Bloomberg News relays.
"Empanadas aren't that expensive, Ricardito," Economy Minister Luis
Caputo shot back in an interview. "People can eat good empanadas
for 16,000 pesos," Caputo told La Nacion, Bloomberg News discloses.
"I'm glad he can eat the most expensive ones." Milei joined,
posting an AI-generated image of Darin from an Instagram story
holding a small gold empanada in a jewellery box, Bloomberg News
relays.
Empanadas - a classic takeout option in Argentina - range in price
depending on size, ingredients and restaurant status. Mi Gusto, a
popular chain on the higher end, sells a dozen for 47,900 pesos,
Bloomberg News discloses. But the median price for 12 in the city
of Buenos Aires was 22,000, closer to Caputo's estimate, according
to data from the municipal government, Bloomberg News notes.
Darin defended his remarks when asked by a local television
station, Bloomberg News says. "Of course there are empanadas of
every kind - more expensive, cheaper, depending on the
neighbourhood," he told América TV. "But it's clear what we're
talking about. Prices are elevated. People know it."
The President's measures have forcefully tamed inflation, bringing
monthly price hikes down to 2.8 percent from a peak of 25.5 percent
when he took office, Bloomberg News discloses.
But in dollar terms, the peso has strengthened significantly since
Milei took office, Bloomberg News relays. It was one of the five
best-performing currencies around the world in 2024, gaining more
than 40 percent against the US dollar, Bloomberg News notes. For
locals and foreigners alike that's also made Argentina home to the
world's second most expensive Big Mac (US$7) and Latin America's
priciest cup of coffee (US$3.50), Bloomberg News discloses.
Milei's economy will a dominant ballot question in October's
midterm vote, when Argentines will elect half of the lower house
House of Deputies and a third of the Senate, Bloomberg News relays.
Investors are watching the election closely to see whether the
country is willing to keep backing the libertarian economist in
longer-term reforms, Bloomberg News notes.
"For the average voter, it's a blessing to be expensive in dollar
terms because their buying power goes up," said economist Martin
Rapetti, founder of consultancy Equilibra, Bloomberg News
discloses. "The thing is salaries in dollar terms went up a ton,
but buying power fell," he added.
Prices for some items in the capital, like the popular pastry, have
increased faster than inflation, Bloomberg News relays. Empanada
prices are up 240 percent in the city since November 2023, compared
with overall consumer price gains of 219 percent over the same
period, Bloomberg News notes.
"It is true that the price of empanadas exceeds cumulative
inflation and I think it's owed mainly to the fact that the
previous government either subsidised or otherwise stepped on food
prices," said Sebastián Menescaldi, an economist at Buenos
Aires-based consultancy EcoGo, Bloomberg News notes.
Everything from wheat flour to milk received government subsidies
under Milei's predecessor, Alberto Fernandez, while barriers to
meat exports forced down local prices — all of which the
libertarian president removed, Bloomberg News discloses.
Meanwhile, price increases since he took office have outpaced pay
increases by 3.6 percent, Menescaldi calculated using the national
statistics agency, Bloomberg News relays.
"People lost purchasing power," he added.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota) -- with an approved immediate
disbursement of an equivalent of US$9.65 billion. Argentina's
IMF-supported program sought to improve public finances and start
to reduce persistent high inflation through a multi-pronged
strategy.
On April 11, 2025, the IMF further approved a 48-month Extended
Fund Facility (EFF) arrangement for Argentina totaling US$20
billion (or 479 percent of quota), with an immediate disbursement
of US$12 billion, and a first review planned for June 2025 with an
associated disbursement of about US$2 billion. The program is
expected to help catalyze additional official multilateral and
bilateral support, and a timely re-access to
international capital markets.
Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term
Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to
'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF
program, among other things. S&P Global Ratings, in February 2025
lowered its local currency sovereign credit ratings on Argentina to
'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from
'raB+'. Moody's Ratings, in January 2025, raised Argentina's local
currency ceiling to B3 from Caa1 and the foreign currency ceiling
to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term
Foreign and Local Currency Issuer Ratings to B (low) from CCC in
November 2024.
[] ARGENTINA: Ratifies WHO Withdrawal During RFK Jr Visit
---------------------------------------------------------
Buenos Aires Times reports that President Javier Milei's government
has ratified its decision to withdraw Argentina from the World
Health Organization (WHO) and reaffirmed its collaboration with
Washington.
The decision to pull out of the WHO was initially disclosed in
February by Argentina's President Javier Milei, following in the
footsteps of his US counterpart Donald Trump who had said in
January the United States would withdraw, according to Buenos Aires
Times.
Milei's government again justified its departure from the UN agency
in a statement, issued during the visit to Buenos Aires of US
Health Secretary Robert F. Kennedy Jr., the report notes.
"The WHO's prescriptions do not work because they are not based on
science but on political interests and bureaucratic structures that
refuse to review their own mistakes," the statement said, the
report relays.
The Foreign Ministry in Buenos Aires previously accused the agency
of "disastrous" management during the Covid-19 pandemic with its
"caveman quarantine," the report discloses.
The announcement came as Kennedy and Argentine Health Minister
Mario Lugones met to define "a joint work agenda that will
strengthen transparency and trust in the health system from a focus
on prevention, food safety and efficiency of spending," the report
says.
"Together with Robert Kennedy, we believe in the future of
collaboration in global health. We have similar visions about the
path forward and we are confident that this will give us the
possibility of deepening the work between both countries," Lugones
said, the report discloses.
The minister said the duo "agree on the need to promote healthier
citizens, based on a better diet," the report relays.
"To this end, we are going to carry out a comprehensive review of
the toxic ingredients present in ultra-processed products and
rethink the approach to chronic diseases," he said, referencing one
of Kennedy's main complaints, the report notes.
Kennedy, a controversial Trump pick for health secretary given his
vaccine scepticism, is expected to meet with Milei during his
visit, the report discloses.
Talks with Foreign Minister Gerardo Werthein and Deregulation &
State Transformation Minister Federico Sturzenegger are also
scheduled, the report says.
In a video broadcast at the WHO's annual assembly, Kennedy urged
other governments to withdraw from the agency and create other
institutions, the report relays.
In his speech, Kennedy alleged that the UN health agency was under
undue influence from China, gender ideology, and the pharmaceutical
industry, the report notes.
Structural Review
Milei's government also announced a "structural review" of
Argentina's health agencies to "organize, update, and make
transparent the structures and processes" of the health system
"that for years operated with overlaps, outdated regulations, and
limited oversight," the report discloses.
Lugones said reforms would promote a new model with an emphasis on
preventative medicine that is "based on scientific evidence and
with a focus on the citizen," the report relays.
The government intends to review all existing national bodies to
"eliminate inefficiencies" and "bureaucracy," according to a
statement, the report says.
Officials will also review the use of additives in food, especially
mass consumption items, the report notes.
Stricter controls for vaccines and fast-track authorisations of
high-cost drugs will also be analysed, the report disclosed.
Talks between officials in Buenos Aires and Kennedy are expected to
focus on the deregulation of Argentina's health system, the report
says.
"He expects to dialogue on key health priorities, including
healthcare reform and deregulation," the US government said in a
statement issued prior to his arrival, the report relays.
Kennedy's visit to Argentina is part of a regional international
tour designed to strengthen alliances and coordinate health policy,
the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota) -- with an approved immediate
disbursement of an equivalent of US$9.65 billion. Argentina's
IMF-supported program sought to improve public finances and start
to reduce persistent high inflation through a multi-pronged
strategy.
On April 11, 2025, the IMF further approved a 48-month Extended
Fund Facility (EFF) arrangement for Argentina totaling US$20
billion (or 479 percent of quota), with an immediate disbursement
of US$12 billion, and a first review planned for June
2025 with an associated disbursement of about US$2 billion. The
program is expected to help catalyze additional official
multilateral and bilateral support, and a timely re-access to
international capital markets.
Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term
Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to
'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF
program, among other things. S&P Global Ratings, in February 2025
lowered its local currency sovereign credit ratings on Argentina to
'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from
'raB+'. Moody's Ratings, in January 2025, raised Argentina's local
currency ceiling to B3 from Caa1 and the foreign currency ceiling
to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term
Foreign and Local Currency Issuer Ratings to B (low) from CCC in
November 2024.
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B R A Z I L
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AZUL SA: NYSE to Commence Delisting Proceedings
-----------------------------------------------
The New York Stock Exchange disclosed that the staff of NYSE
Regulation has determined to commence proceedings to delist the
American depositary shares, each ADS representing three preferred
shares, of Azul S.A. from the NYSE. Trading in the Company’s
ADSs will be suspended immediately.
NYSE Regulation reached its decision that the Company is no longer
suitable for listing pursuant to NYSE Listed Company Manual Section
802.01D after the Company's May 28, 2025 press release that the
Company has entered into a Restructuring Support Agreement with its
key stakeholders to effectuate a reorganization process under
Chapter 11 in the United States. In reaching its delisting
determination, NYSE Regulation notes the uncertainty as to the
ultimate effect of this process on the value of the Company’s
ADSs.
The Company has a right to a review of this determination by a
Committee of the Board of Directors of the Exchange. On May 29,
2025, the Company informed the Exchange that it will not exercise
that right. As a result, the NYSE will apply to the Securities and
Exchange Commission to delist the Company’s ADSs.
About Azul SA
Azul SA is Brazil's third-largest airline. The company operates a
major air transportation network providing scheduled passenger
services across Brazil and to international destinations. Founded
in 2008, Azul has grown to become one of Brazil's leading carriers
with a focus on domestic routes and connecting previously
underserved markets throughout the country.
Azul SA and affiliates sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 25-11176) on May 28,
2025. In its petition, the Debtor reports $4.5 billion in assets
and $9.6 billion in liabilities.
The Debtor is represented by Timothy Graulich, Esq. at Davis Polk
&
Wardwell LLP. The Debtor's Financial Advisor / CRO is Samuel
Aguirre at FTI Consulting Inc. and its Claims Agent is Stretto,
Inc.
BRASKEM SA: Fitch Lowers IDR to 'BB', Outlook Stable
----------------------------------------------------
Fitch Ratings has downgraded Braskem S.A.'s Issuer Default Ratings
(IDRs) to 'BB' from 'BB+'. Fitch has also downgraded Braskem
America Finance Company's senior unsecured ratings to 'BB' from
'BB+' and Braskem Netherlands Finance B.V.'s senior unsecured
rating and subordinated rating to 'BB' from 'BB+' and to 'B+/RR4'
from 'BB-', respectively. Fitch has affirmed Braskem's National
Scale rating at 'AAA(bra)'. The Rating Outlook is Stable.
The downgrade reflects Braskem's prolonged lower-cycle
petrochemical spreads, resulting in a weaker financial profile than
Fitch previously projected. The company is working to mitigate cash
burn with initiatives such as asset and investment rationalization,
cost reduction, renegotiation efforts, and promoting
competitiveness in local industry.
Fitch anticipates that Braskem's financial flexibility will remain
a core strength during market instability until recovery occurs.
Any further negative developments related to the geological event
in Alagoas could pressure the ratings.
Key Rating Drivers
Prolonged Petrochemical Downturn: The current downturn in the
petrochemical sector is unprecedented in depth and duration and
could reduce future mid-cycle margins compared to previous decades.
Structural shifts include significant supply shocks from increased
PE capacity in the US, increased integration and self-sufficiency
in China, and the possible reduction of global naphtha supply by
rationalization and reconfiguration of refineries in Europe. Fitch
expects recovery to be gradual, starting in 2028. Geopolitical
tensions and weak global macroeconomic performance increase
uncertainty about whether market players will adapt strategies for
preserving cash.
Medium-Term Leverage Above Triggers: Fitch forecasts Braskem's net
leverage, excluding Braskem Idesa, will be 6.0x in 2025 and 5.0x in
2026. As spreads improve slightly, despite remaining below midcycle
conditions, leverage should fall to 3.5x in 2027.
Braskem is actively pursuing initiatives to preserve cash, with
some on track to resolve in the coming months. These initiatives
could create USD500 to USD700 million in EBITDA annually. They
include investment prioritization, asset rationalization, cost
reduction, expansion of the Renewable Energy Incentive
Qualification special tax regime, implementation of antidumping
measures and maintenance of import tax. Furthermore the ramp-up of
green polyethylene (PE) is another upside.
FCF Anticipated to Reach Neutrality: Driven by some of the new
initiatives, Fitch forecasts that FCF, excluding disbursements
related to Alagoas, will break even this year. EBITDA is projected
to be approximately USD 1.1 billion in 2025 and USD 1.4 billion the
year after, with annual investments totaling USD 550 million,
comprising USD 400 million for maintenance and USD 150 million for
strategic purposes related to REIQ Investimentos, without impact in
cash flows. Fitch projects FCF will be neutral to slightly positive
through 2026 and close to USD 500 million in 2027.
Solid Business Profile: Braskem maintains strong market positions
as the seventh largest petrochemical company globally. In Brazil,
it is the leader with the only integrated operations, commanding
over 50% market share in its two primary products, PE and
polypropylene (PP), which account for 60% of its revenues. Braskem
is the largest PP producer in the U.S., bolstered by a modern and
cost-efficient facility. The company faces the challenge of
reducing its reliance on naphtha to enhance its positioning on the
global ethylene cost curve. The development of the green PE market
could be transformational for the company in the long run.
Sale of Novonor's Stake: Braskem's ratings do not incorporate the
potential impact of the recent announcement regarding Nelson
Tanure's offer to acquire control of Braskem from Novonor. If the
transaction moves forward, Fitch will assess the rating
implications once there is more visibility into the outcome and
guidelines for strategic, operational, and financial policies.
Peer Analysis
Fitch expects Braskem's leverage to be elevated at around 6.0x in
2025, due to the prolonged sector downturn and geopolitical
tensions affecting cash flow stability. To counter these pressures,
Braskem is pursuing asset rationalization, cost reduction
initiatives and other measures to protect the local industry. In
contrast, peer Westlake Corporation (BBB/Stable) benefits from
cost-advantaged natural gas liquids-based feedstocks, supporting
robust free cash flow and maintaining leverage below 2.0x. Its
diversified operations in chlor-alkali and ethylene chains provide
a stable financial outlook despite cyclical construction demand
pressures.
Dow Inc. (BBB+/Stable) and LyondellBasell Industries (BBB/Stable),
with their scale and diversification, demonstrate financial
resilience. Dow's significant size and feedstock flexibility
support stable margins and consistent free cash flow, with EBITDA
leverage expected to improve below 2.3x by 2025. Strategic
sustainability investments further position Dow for growth amid
industry-wide capacity additions. LyondellBasell leverages access
to competitively priced North American feedstocks to maintain
resilient margins. Its focus on sustainability enhances competitive
positioning, although macroeconomic headwinds may limit immediate
EBITDA growth.
Orbia (BBB/Stable) leverages product and geographic diversification
to maintain financial flexibility, with net leverage expected to
decline below 2.5x by 2026. Backward integration in PVC and
fluorine businesses provides stability despite sector volatility.
Alpek (BBB-/Stable) focuses on value-added products and efficiency
initiatives, projecting leverage improvements from 2.5x in FY 2024
to 2.0x by FY 2026.
Cydsa (BB+/Stable) benefits from diversified operations and strong
domestic brand recognition, maintaining EBITDA margins above 28%.
Strategic investments in technology enhance its cash flow profile,
supporting its rating despite its smaller scale.
Key Assumptions
- Brazil PE projected revenue of USD4.4 billion, USD4.7 billion and
USD4.8 billion during 2025-2027;
- Brazil PP projected revenue of USD2.0 billion USD2.0 billion and
USD2.2 billion during 2025-2027;
- Brazil vinyls projected revenue of USD680 million, USD680 million
and USD700 million during 2025-2027;
- Brazil ethylene/propylene projected revenue of USD830 million,
USD950 billion and USD950 billion during 2025-2027;
- U.S. and Europe PP projected revenue of USD3.0 billion, USD3.4
billion and USD3.6 billion during 2025-2027;
- PE-ethane reference spreads of USD795/ton in 2025, USD820/ton in
2026 and USD825/ton in 2027;
- PE-naphtha reference spreads of USD465/ton in 2025, USD465/ton in
2026 and USD470/ton in 2027;
- PP-propylene reference spreads of USD440/ton in 2025, USD460/ton
in 2026 and USD475/ton in 2027;
- PVC reference spreads of USD340/ton in 2025, USD380/ton in 2026
and USD410/ton in 2027;
- Annual maintenance Capex of approximately USD400 million
- No dividends to shareholders during the analysis horizon.
Recovery Analysis
The recovery analysis for Braskem Netherlands Finance B.V.'s
Subordinated Notes assumes that Braskem would be a going concern
(GC) in bankruptcy and that it would be reorganized rather than
liquidated. GC Approach:
- A 10% administrative claim;
- The GC EBITDA is estimated at USD2 billion. The GC EBITDA
estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
valuation of Braskem;
- EV multiple of 5.0x.
With these assumptions, Fitch's waterfall generated recovery
computation (WGRC) for the subordinated notes is in the 'RR1' band.
However, according to Fitch's Country-Specific Treatment of
Recovery Ratings Criteria, the Recovery Rating for corporate
issuers in Brazil is capped at 'RR4'.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Net debt/EBITDA above 4.5x, on average through the cycle,
excluding Braskem Idesa;
- Sustained negative FCF at the bottom of the cycle that results in
incurring additional debt;
- Sustained EBITDA interest coverage below 1.0x;
- Material additional contingent claims for the geological event in
Alagoas;
- Material financial support to Braskem Idesa.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Net debt/EBITDA below 3.0x on average through the cycle,
excluding Braskem Idesa;
- Neutral to positive FCF through the cycle, excluding
disbursements for Alagoas.
Liquidity and Debt Structure
Braskem adopts a conservative financial strategy to limit the risks
associated with its exposure to the cyclical and capital-intensive
nature of the petrochemical business. The company has a strong cash
position, with USD2.0billion of readily available cash and
marketable securities as of March 31, 2025, excluding Braskem Idesa
(USD266 million). Gross debt stands at USD8.5 billion, USD185
million of which is due in 2025 and USD355 million in 2026.
The company's financial flexibility is enhanced by a USD1 billion
unused revolving credit facility due in 2026, and Fitch expects
them to remain committed to preserving liquidity by maintaining a
conservative dividend policy particularly while leverage is above
2.5x. The company can reduce capex and fixed costs, optimize
working capital and monetize tax credits as market conditions
linger.
Issuer Profile
Braskem S.A. produces and sells chemicals, petrochemicals, fuels,
steam, water, compressed air and industrial gases. The company has
plants in Brazil, the U.S., Germany and Mexico that produce
thermoplastic resins, such as polyethylene, polypropylene and
polyvinyl chloride.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
Braskem S.A. has an ESG Relevance Score of '4' for Waste &
Hazardous Materials Management; Ecological Impacts due to the
operations' disruption and large cash outflows triggered by the
geological event in Alagoas, which has a negative impact on the
credit profile, and is relevant to the ratings in conjunction with
other factors.
Braskem S.A. has an ESG Relevance Score of '4' for Human Rights,
Community Relations, Access & Affordability due to the reparation
costs incurred following the geological event in Alagoas, to
relocate over 14,000 families from neighboring areas, which has a
negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Braskem
Netherlands
Finance B.V.
senior
unsecured LT BB Downgrade BB+
senior
unsecured LT BB Downgrade BB+
subordinated LT B+ Downgrade RR4 BB-
Braskem America
Finance Company
senior
unsecured LT BB Downgrade BB+
Braskem S.A. LT IDR BB Downgrade BB+
LC LT IDR BB Downgrade BB+
Natl LT AAA(bra)Affirmed AAA(bra)
senior
unsecured Natl LT AAA(bra)Affirmed AAA(bra)
===========================
C A Y M A N I S L A N D S
===========================
SHELF DRILLING: Moody's Affirms 'B3' CFR, Outlook Remains Stable
----------------------------------------------------------------
Moody's Ratings has affirmed Shelf Drilling, Ltd.'s B3 long term
corporate family rating and B3-PD probability of default rating.
Concurrently, Moody's have affirmed the B3 backed senior secured
notes (SSNs) rating issued under the wholly owned subsidiary Shelf
Drilling Holdings, Ltd. The outlook on both entities remains
stable.
RATINGS RATIONALE
The rating action reflects Shelf Drilling's adequate credit metrics
following a robust operating performance during 2024 and the first
quarter of 2025 underpinned by an adequate utilization rate of 79%
and a growing average dayrate to $94k (thousand) per day in Q1 2025
compared to $82k per day a year before. Shelf Drilling generated
$287 million EBITDA (on a Moody's-adjusted basis, includes deferred
cost amortization) for the last 12 months ending March 31, 2025
compared to $273 million in 2023 and $269 million in 2024. As a
result, Moody's-adjusted leverage continued to improve from its
peak levels of 9.4x in 2021 and 7.4x in 2022 and reached 4.7x in
March 2025.
Nevertheless, Shelf Drilling's revenue visibility is limited by its
fleet contracting activity. As per the company's last fleet status
update in May 2025, 12 of its 33 rigs will be off the contract by
year-end 2025, highlighting Shelf Drilling's exposure to
re-contracting risk during the next 12 to 18 months. After the
recent announcement of trade tariffs by the US government, oil
prices declined to below $70 per barrel of Brent. Moody's expects
oil prices to remain low in the current difficult macroeconomic
environment. Prolonged low oil prices would negatively impact oil
producer capital spending and thus demand for Shelf Drilling's
rigs, increasing rig re-contracting challenges. Nevertheless, Shelf
Drilling is more exposed to brownfield operations, partly
protecting the company from lower oil prices.
Weak contracting visibility, macroeconomic uncertainty and
sustained low oil prices will add pressure on the company's EBITDA
generation during the next 18 months. Moody's expects its
Moody's-adjusted EBITDA will decline to $248 million in 2025. Lower
expected EBITDA levels will weaken Moody's-adjusted leverage to
4.9x in 2025 from 4.7x in the last 12 months to March 2025 while
interest cover (measured as Moody's-adjusted EBITDA over interest
expense) will remain below 2.0x.
Shelf Drilling's liquidity remains adequate, although weak contract
renewal rates before year end 2025 could result in material cash
burn during 2026 and 2027. The company could benefit from asset
disposal, however currently Moody's do not expect material cash
inflows from rig sales. Shelf Drilling's high debt service
requirements of more than $200 million per year (including
mandatory notes amortization and interest payments) will weaken its
liquidity position if contracts are not renewed in a timely manner.
Negative free cash flow generation, weak utilization rates and
challenges to recontract existing rigs, all translating into weaker
liquidity, would result in negative rating pressure.
The B3 CFR reflects Shelf Drilling's (1) exposure to geographically
diversified shallow water oil basins; (2) track record of signing
and renewing contracts in a competitive environment and having
long-standing relationships with blue-chip companies; and (3)
adequate liquidity and improving credit metrics during the last two
years.
Conversely, the rating is constrained by (1) the company's exposure
to a cyclical operating environment susceptible to uncertain global
oil markets and macroeconomic developments, both increasing
re-contracting risk; (2) a track record of high capital spending
requirements for a relatively old fleet, excluding the 2022
acquisitions from Noble Drilling Corporation, which has a younger
fleet; and (3) the company's limited track record of positive free
cash flow generation and history of aggressive capital structures.
LIQUDITY PROFILE
Shelf Drilling's liquidity is currently adequate in the absence of
any material debt maturities until November 2028. As of March 31,
2025, the company had consolidated cash balances of $207 million,
including $35 million at the Shelf Drilling North SEA Limited
(SDNS) subsidiary. Additionally, Shelf Drilling benefits from an
undrawn $150 million revolving credit facility due 2028 ($22
million was utilized for issuing bank guarantees).
Moody's expects that the company will generate positive free cash
flow during 2025 but 2026 and 2027 free cash flow generation will
be contingent to contract renewals. Shelf Drilling has a yearly $75
million mandatory redemption on its $1.095 billion backed senior
secured notes and its $315 million bond has an additional $20
million yearly mandatory amortization. Mandatory note amortization
together with interest payments will result in more than $200
million annualized debt service requirements until 2027.
Moody's do not expect any pressure on liquidity during the next 12
to 18 months at the group level given the adequate liquidity
position. However, delays in contract renewals or new agreements at
low dayrates could add pressure to Shelf Drilling's and SDNS's
liquidity. Additionally, any further unanticipated contract
suspension, capital spending and a decrease in dayrates could put
additional strain on the company's liquidity profile.
RATING OUTLOOK
The stable outlook reflects Moody's expectations that Shelf
Drilling will be able to maintain credit metrics that are
commensurate with its rating level, despite potential challenges in
re-contracting rigs.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if (1) the company materially reduces
gross debt from current levels so that its credit metrics are less
sensitive to a potential deterioration in financial performance;
(2) the company continues to re-contract rigs as they roll off
while securing higher dayrates; (3) Moody's-adjusted debt/EBITDA is
sustained below 4.5x with Moody's-adjusted EBITDA/interest expense
sustained above 2.5x; and (4) the company establishes a track
record of generating strong positive and growing free cash flow.
The ratings could be downgraded if (1) the company faces
difficulties re-contracting rigs or these are signed at lower
dayrates; or (debt/EBITDA exceeds 6.5x and EBITDA/interest declines
below 1.5x, both on a sustained basis (all metrics are
Moody's-adjusted); or (3) free cash flow turns negative and
liquidity weakens significantly, including in case of limited
headroom under covenants.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Oilfield
Services published in January 2023.
COMPANY PROFILE
Shelf Drilling, Ltd. is a Cayman Islands incorporated holding
company that owns 33 jackup rigs including five rigs under its
subsidiary Shelf Drilling North Sea Limited. The company conducts
drilling operations through various subsidiaries in the Southeast
Asian, Middle Eastern, Indian, West African, North Sea, North
African and Mediterranean markets. Shelf Drilling generated
revenues of $976 million and Moody's-adjusted EBITDA of $287
million for the last 12 months ended March 31, 2025. The company is
listed on the Oslo Stock Exchange since June 2018.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Gets Pressured by Tourism Sector
----------------------------------------------------
Dominican Today reports that former Central Electoral Board
President and Fuerza del Pueblo political leader Roberto Rosario
has sounded the alarm over mounting pressure from the Dominican
Republic's tourism sector to implement a new plan regulating
Haitian workers. Speaking on the television program "Hoy Mismo"
(Color Vision) and radio station La Super 7, Rosario noted that
unlike construction and agriculture, which have long relied on
Haitian labor, hotel and resort operators are now lobbying for
formal quotas, according to Dominican Today.
Rosario argued that any jobs generated by the booming tourism
sector could be readily filled by Dominican workers, the report
notes. He cautioned that periodic "regulation plans" risk becoming
a permanent fixture unless clear policies are established to train
and qualify locals for those roles, the report notes relays. "We
must preserve Dominican labor and exercise state control over
migration," he said.
Highlighting a dramatic demographic shift, Rosario recalled that in
2017 roughly 500,000 foreigners lived in the country under
manageable conditions, the report discloses. Today, he warned,
that figure has "multiplied considerably," driven by Haitians
fleeing what he described as a "dysfunctional narco-state." "There
is no prospect for resolution on the horizon," he lamented, the
report notes says.
To reduce reliance on migrant workers, Rosario urged the government
to mechanize agricultural production and streamline internal labor
processes, the report notes. Without such measures, he predicted,
dependence on Haitian labor will only deepen complications across
both rural and urban economies, the report notes relays.
Rosario's 2024 Warning on Migration Enforcement
In October 2024, Rosario publicly challenged President Luis
Abinader to enforce migration policies consistently, following
comments by Agriculture Minister Limber Cruz defending the use of
undocumented Haitian labor, the report discloses. Rosario pointed
out that the 2014 Migration Law's regularization plan should have
been used to legalize these workers rather than circumvented, the
report says. He accused Cruz of violating national law and
profiting from human-trafficking networks that exploit irregular
migrants, the report relays.
Rosario concluded that without accountability, both for business
owners who hire undocumented workers and for officials who enable
them, sovereignty and the rule of law will continue to erode, the
report notes notes. "If we truly defend our national identity, we
must also defend our laws," he added.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCR-LA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic was raised
to 'BB' in December 2022 with stable outlook. Moody's credit
rating for Dominican Republic was last set at Ba3 in August 2023
with the outlook changed to positive. Fitch, in December 2023,
affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the outlook to positive.
===========
M E X I C O
===========
ASCEND PERFORMANCE: Seeks to Hire Ordinary Course Professionals
---------------------------------------------------------------
Ascend Performance Materials Holdings Inc. and its affiliates seek
approval from the U.S. Bankruptcy Court for the Southern District
of Texas to retain non-bankruptcy professionals in the ordinary
course of business.
The Debtors need ordinary course professionals to perform services
for matters unrelated to this Chapter 11 case.
The Debtors seek to pay OCPs 100 percent of the fees and expenses
incurred.
The Debtors do not believe that any of the OCPs have an interest
materially adverse to them, their estates, creditors, or other
parties in interest in connection with the matter upon which they
are to be engaged.
The OCPs include:
Tier 1
Foley & Lardner LLP
-- Legal
McGuireWoods LLP
-- Legal
Tier 2
KPMG LLP
-- Accounting / Consulting
Trinity Consultants Inc.
-- Consulting
Roland Berger Strategy Consulting
-- Consulting
Tier 3
Charter Brokerage LLC Accounting
Dentons Lee (Korea)
-- Legal
Law Offices of Roberta M Rossi
-- Legal
Montrose Environmental Group Inc.
-- Consulting
BDO USA LLP
-- Accounting
WSP USA Inc.
-- Consulting
Tier 4
Munoz Tamayo & Asociados Abogados
-- Legal
Blank Rome LLP
-- Legal
Heuking Kuhn Luer Wojtek LLP
-- Legal
Reach24H Consulting Group
-- Consulting
Holland & Knight LLP
-- Legal
Foster LLP
-- Legal
DNV GL Business Assurance USA Inc.
-- Consulting
DLA Piper LLP (US)
-- Legal
Transperfect Translations International Inc.
-- Translation
Maron Marvel Bradley Anderson & Tardy LLC
-- Legal
Keller and Heckman LLP
-- Legal
Saitas and Seales Inc.
-- Consulting
Loyens & Leoff N.V.
-- Legal
Womble Bond Dickinson (US) LLP
-- Legal
Stevens Environmental Consulting LLC
-- Consulting
PPM Consultants, Inc.
-- Consulting
About Ascend Performance Materials Holdings
Ascend Performance Materials Holdings, together with their
non-Debtor affiliates, are one of the largest, fully-integrated
producers of nylon, a plastic that is used in everyday essentials,
like apparel, carpets, and tires, as well as new technologies, like
electric vehicles and solar energy systems. Ascend's business
primarily revolves around the production and sale of nylon 6,6
(PA66), along with the chemical intermediates and downstream
products derived from it. Common applications of PA66 include
heating and cooling systems, air bags, batteries, and athletic
apparel. Headquartered in Houston, Texas, Ascend has a global
workforce of approximately 2,200 employees and operates eleven
manufacturing facilities that span the United States, Mexico,
Europe, and Asia.
Ascend Performance Materials Holdings Inc. and its affiliates filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Tex. Lead Case No. 25-90127) on April 21, 2025.
In the petitions signed by Robert Del Genio, chief restructuring
officer, the Debtors disclosed $1 billion to $10 billion in both
estimated assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Bracewell LLP and Kirkland & Ellis LLP as
counsel; PJT Partners, Inc. as investment banker; FTI Consulting,
Inc. as restructuring advisor; and Deloitte LLP as tax advisor.
Epiq Corporate Restructuring LLC is the Debtors' claims, noticing,
and solicitation agent.
=======
P E R U
=======
VOLCAN COMPANIA: Moody's Hikes CFR to B3 & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Ratings has upgraded Volcan Compania Minera S.A.A. y
Subsidiarias ("Volcan")'s Corporate Family Rating and its 8.75%
Senior Secured notes to B3 from Caa1. Moody's have also upgraded
Volcan's 4.375% Senior Unsecured notes to Caa1 from Caa2. The
outlook was changed to stable from positive.
RATINGS RATIONALE
The rating action reflects a reduction in refinancing risk due to
better than expected cash flow generation ahead of the $96 million
in debt maturing in 2026 (outstanding). During the last twelve
months ended March 2025, Volcan generated $97 million in free cash
flow (FCF) as adjusted by us, taking cash balance to $154 million,
up from $62 million in December 2023. During 2024, cash
strengthened given: 1) stable cost and production, 2) hedging
strategy and 3) strong silver prices.
These factors support FCF generation, which Moody's expects now to
be neutral on average in the 2025-2026 period considering $108
million in growth capex related to the expansion of its Romina
project and around $200 million per year in sustained capex in the
same period. The startup of Romina project, which the company
expects by June 2026, will benefit the consolidated cost structure
as Romina's production cost is estimated at $45/MT (metric ton),
compared with Volcan's consolidated cost in Q1 2025 of $51.7/MT.
Romina is a polymetallic project in the Alpamarca unit with a LOM
average estimated production per year of 40,000 MT of zinc, 20,000
MT of lead and 1 million ounces of silver. As of December 2024, the
company also reported a 56% increase in its reserves due to the
inclusion of Romina in the reserve inventory.
The company's 2026 maturities include $68 million due in February
related to its senior unsecured notes (outstanding), $20 million
related to its syndicated loan (unrated) and $8 million related to
prepaids.
Volcan's B3 CFR considers its relatively high cost structure
coupled with debt levels which increase the volatility through
commodities cycles. The B3 also incorporates a track record of
tolerance to refinancing risk, as well as geographic concentration
in Peru and Volcan's modest scale compared with that of its global
peers.
Conversely, Volcan's B3 CFR reflects the balanced portfolio of zinc
and silver, adequate credit metrics for the rating category and
adequate liquidity.
As of March 2025, the company's capital structure includes a $342
million term loan (unrated) and $300 million secured notes
(outstanding), which benefit from a collateral package including a
trust over receivables, shares of subsidiaries and mortgages over
most of the company's assets. The term loan also benefits from a
cash sweep mechanism that allow excess cash above $70 million
-after restricted cash and debt service (including interests and
principal) of the next quarter- to be directed 50% to the repayment
of the term loan and 50% directed to fund the expansion of Romina.
The Caa1 rating of the $68 million in senior unsecured notes due
February 2026 (outstanding), one notch below CFR, reflects its
senior unsecured nature and subordination in the payment
waterfall.
The stable outlook incorporates Moody's views that the company will
sustain its cash flow generation through a combination of a stable
cost structure, hedges and strong silver prices. The stable outlook
also considers that Volcan will be able to ramp up Romina on budget
and on time.
The upgrade also reflects governance considerations as key drivers
of the rating action including and improved credit metrics and
liquidity, which is reflected now in the company's Financial
Strategy and Risk Management assessment that was changed to 4 from
5, and the overall exposure to governance risks (Issuer Profile
Score or "IPS") to 4 (G-4) and Volcan's Credit Impact Score to 4
(CIS-4), from 5. The ESG Credit Impact Score is CIS-4, revised from
CIS-5, since ESG considerations are a constraint for the rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating upgrade would require a track record of consistent
adequate liquidity through the cycle. An upgrade will be subject to
the maintenance of Moody's adjusted leverage below 4x and retained
cash flow / debt above 15% at different price points. Longer term,
positive pressure could arise should the company improve its cost
position, increase its size or geographic diversification.
Lower than expected cash flow generation due to soft commodity
prices, decline in production, higher costs or delays in the
startup of Romina that result in additional investments, could lead
to a downgrade. Additionally, downgrade pressure could emerge if
debt/EBITDA is maintained above 5.0x.
The principal methodology used in these ratings was Mining
published in April 2025.
Volcan Compania Minera S.A.A. y Subsidiarias (Volcan) is a Peruvian
mining company that primarily produces zinc and lead concentrate
and some copper concentrate, all with high silver content. The
company operates through four operating units including six mines
(four underground mines and two open pits), five concentrator
plants and one leaching plant. All of Volcan's operations are
located in Peru, and it reported revenue of $1,062 million for the
12 months that ended March 2025. Volcan is a holding company listed
on the stock exchanges of Lima, Santiago and Madrid. Since May 2024
Transition Metals AG, subsidiary of Integra Capital, holds a
controlling stake of 63% in Volcan's Class A voting shares, which
is equivalent to a 23.3% economic interest in Volcan.
=====================
P U E R T O R I C O
=====================
COOPERATIVA DE SEGUROS: A.M. Best Affirms 'C' Fin. Strength Rating
------------------------------------------------------------------
AM Best has revised the outlook to positive from stable for the
Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the
Financial Strength Rating (FSR) of C (Weak) and the Long-Term ICR
of "ccc" (Weak) of Cooperativa de Seguros de Vida de Puerto Rico
(COSVI) (San Juan, Puerto Rico). The outlook of the FSR is stable.
The Credit Ratings (ratings) reflect COSVI's balance sheet
strength, which AM Best assesses as very weak, as well as its
adequate operating performance, limited business profile and
marginal enterprise risk management.
The positive outlook on the Long-Term ICR is related to the
expected continued efforts to improve risk-adjusted capitalization
in the near term, as measured by Best's Capital Adequacy Ratio
(BCAR). This is led by management's strategic initiatives,
including organic growth over the last few years, as well as
anticipated additional improvement in the company's overall risk
management. While AM Best asserts that the balance sheet strength
assessment is still very weak, recognizable material improvements
have been made over the medium term, and surplus and risk-adjusted
capital is expected to continue to improve going forward.
COSVI's absolute level of capital continued to increase as of
year-end 2024, by another 3.8% compared with the prior year, as a
result of an operating income of almost $1 million. The company's
risk-adjusted capitalization, as measured by BCAR, continued to
improve slightly but remains assessed as very weak. Unadjusted
financial leverage remains just within AM Best's tolerances, and
quality of capital remains neutral to COSVI's ratings. AM Best
notes that COSVI will also need to demonstrate a continued trend of
executing its capital management plan along with additional support
by the shareholders before any potential upward movement in the
balance sheet strength assessment is contemplated. AM Best will
continue to monitor progress closely on all initiatives presented.
INSTITUTO DE EDUCACION: Seeks Subchapter V Bankruptcy
-----------------------------------------------------
Instituto de Educacion y Tecnologia Inc. filed Chapter 11
protection in the U.S. Bankruptcy Court for the District of Puerto
Rico on May 16, 2025. According to court filing, the Debtor
reports between $500,000 and $1 million in debt owed to 1 and 49
creditors. The petition states funds will be available to unsecured
creditors.
About Instituto de Educacion y Tecnologia Inc.
Instituto de Educacion y Tecnologia Inc. is a non-profit
educational institution operating in Puerto Rico that provides
educational services through a contract with the Department of
Education of Puerto Rico valid until June 30, 2025.
Instituto de Educacion y Tecnologia Inc. sought relief under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
P.R. Case No. 25-02193-11) on May 16, 2025. In its petition, the
Debtor reports estimated assets between $100,000 and $500,000 and
estimated liabilities between $500,000 and $1 million.
Honorable Bankruptcy Judge Enrique S. Lamoutte Inclan handles the
case.
The Debtors are represented by Carmen D. Conde Torres, Esq. at C.
CONDE & ASSOC.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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